Carlos Tevez declared last night that his relationship with key figures at Manchester City had "broken down and is now beyond repair" after it emerged that he has rejected an extraordinary seven-figure, one-off payment offered by the club when he told them in August that he was disillusioned and desperate to leave.

City revealed yesterday that Tevez is already their highest paid player, with a salary of over £200,000-a week after tax, even eclipsing that of Yaya Touré. But in the light of the Argentine's declaration that he wanted to leave, the club offered him the lump sum – believed to total several million pounds – in the hope of retaining him for at least this critical season.

City remain insistent that the striker will not leave next month, having rejected a transfer demand which he personally dictated, in Spanish, to his solicitors who faxed the club on Tuesday evening. In a day of claim and counter-claim yesterday, the club also cited a request from the players' representatives for a one-year contract extension – made in October – as proof that the underlying motive here is money. City insist they do not offer new deals in mid-season.

But the player's refusal of the one-off payment which his representatives claim would have put him in the same salary bracket as Real Madrid's £10m-a year Cristiano Ronaldo, the second best paid footballer on the planet behind David Beckham, suggests that nothing will keep him.

"Now I need to clear my head and think because this is an important part of my career," a statement released by Tevez's representatives said last night. "My feelings have not changed and it is regrettable we have reached this situation. This decision is not about money."

Chelsea, the only other possible Premier League destination for Tevez, may seek to capitalise on the player's desire to leave, though that would make a mockery of his claims that his unhappiness is borne out of separation from his two daughters who live with his estranged partner, Vanesa, in Buenos Aires.

Real Madrid seem a more likely destination. Tevez is said to consider one of his options to be a move to Spain in the hope that Vanesa, who is Spanish-speaking may be willing to move there with daughters Katie and Florencia. Jose Mourinho, the Real coach, is likely to be willing to take the Argentine. He is desperately in need of another striker and Tevez would certainly fit the bill.

Failing such a move, the Tevez camp say he may be prepared to return to play in Argentina, or even retire from the game altogether at the age of 26 if he cannot find a way of being with his daughters. Tevez was granted special dispensation to leave England on Friday, having been suspended for Saturday's match at West Ham – part of what the club insisted was "sensitivity to Carlos' personal circumstances". Tevez has spent his period away at a spa facility in Italy, rather than Buenos Aires, though his representatives said that the player, who is expected back in Manchester this evening, had been granted only three days leave – insufficient time to visit Argentina and return in time for training.

There is deep confusion about Tevez's main problem. He has spoken repeatedly of the "hurt" he feels at being away from his daughters and has also complained repeatedly about City manager Roberto Mancini's training regime.

Last night's statement, which made no reference to his daughters and said Tevez had "no personal issue with the manager Roberto Mancini", seemed to be a pointed attack on City chief executive Garry Cook. "Certain executives and individuals at the club" were the problem, the statement said. "They know, because I have told them."

Tevez, who is said to be furious that an extended interview he gave to the City website and in-house magazine, was released 24 hours after the touchline row with Mancini in last weekend's Bolton match, informed City as soon as he returned from the World Cup that he wished to leave. The player's representatives say that City asked his manager Kia Joorabchian to talk him around and that, with only days of the transfer window left to run, Joorabchian advised him it was too late to move and he should settle down.

The Tevez camp claim that City then offered a new contract. Joorabchian proposed some alternatives including asking for a one-year contract extension. The transfer request has been made against Joorabchian's advice.

City say that the one-off sum was a "bonus payment" for Tevez's achievements last season. They insist only image rights and endorsement deals may be done in mid-season. If Tevez refuses to fulfil his contract for the remainder of the season, City may have to sue him for breach of contract, which would ultimately leave him a free agent.